| Disclaimer This edited version will be removed from the Database after 30 September 2025. If you believe the issues detailed in this edited version warrant retention in an alternative form, email publicguidance@ato.gov.au This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011572944807
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Am I Business - Gambling
Question
Are you entitled to deductions in relation to your gambling expenses?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You are a trainer, you work on a contract basis.
You gamble on tennis matches, soccer, cricket and other sporting events.
You use an online betting service to place your bets.
You made over 1300 bets in the relevant year.
You made losses of approximately $100,000.
You have an ABN.
You do not have an office or employ any staff in your gambling activities.
You do not use a database to calculate the odds or use systematic methods.
You research the ranking of tennis players and their performance on the various surfaces over a 6 month period.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Summary
Any expenses you incur which relate to your gambling activities are not deductible, conversely the income you receive from your gambling activities is not assessable.
Detailed reasoning
Profits from gambling wins are not assessable under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) unless you carry on a business of betting or gambling.
Taxation Ruling IT 2655 discusses the Commissioner's opinion regarding carrying on a business of gambling.
Ultimately each case will depend on its own facts.
No decided Australian court case has found that the winnings of a mere punter are assessable (or that the losses are deductible).
Mere punting may constitute a business, however the element of chance as a predominant ingredient will generally preclude such a finding.
The Court in Brajkovich v. FC of T 89 ATC 5227; (1989) 20 ATR 1570, identified the principal criteria for determining whether or not a person is in the business of gambling:
Whether the betting is conducted in a systematic, organised and businesslike way
The scale of the gambling activities
Whether betting is related to or part of other activities of a businesslike character
Is the gambling activity principally for profit or principally for pleasure?
Whether the form of betting chosen is likely to reward skill and judgement or depends purely on chance
Whether the gambling activity is of a kind ordinarily thought of as a hobby or pastime
Application to your circumstances
We have determined that you do not carry on a business of gambling. We have based our decision on the indicators in IT 2655.
The losses you have made in relation to this activity are not deductible under section 8-1 of the ITAA 1997.
Factors considered
In carrying out your gambling activities you choose what sporting events to bet on, the surface they are playing on and their form in the prior 6 months.
Your gains and losses are dependent on chance rather than skill. It is the combined abilities of the athlete or the team that determines the outcome of the game, not any action taken by you.
You have no involvement in the sporting industry besides gambling.
You do not rent an office or employ staff.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
